If you are looking for rock-solid businesses that have a very high success rate, then you are in the right place.
Now let me start by saying that there is no business that will never fail. Any enterprise where you can make serious money is going to have some risk associated with it. In fact, there is a well-known principle called the “risk-return tradeoff” that states that the potential return rises with a corresponding increase in risk.
It's why stocks produce much higher yields over the long term than a typical bank savings account.
Now if you look at really high yielding assets, like businesses, they can often generate returns well in excess of 30%. But all of that comes with some serious risk. According to information from the Bureau of Labor Statistics, approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Source
But don't lose hope, there are certain businesses that enjoy a much higher success rate.
In this article, we are going to cover 7 types of businesses with very low failure rates. I will also include data showing these low failure rates and some great resources to show you how you can get started in these businesses.
Why are failure rates important? Most entrepreneurs devote a lot of time, energy and money to starting their businesses. If you are thinking about starting a business, it's crucial that you pick one that is likely to succeed. Maybe you have an exceptional business mind and can buck the trend, but I find that having the odds in your favor is always a good thing.
On that note, let's get into it!
Note: If you prefer a condensed version of this article in video format, check out my YouTube video below.
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The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
Vending Machine Routes
One of my favorite businesses is a vending machine route.
With a relatively modest investment, you can buy a vending machine and just get started. Once you have your vending machine, all you need to do is find a well-trafficked location that will generate sales for you. It's really as simple as that.
Start with a single machine, figure out how the business works, and then slowly expand. Before you know it, you can have a vending machine empire that can generate thousands of dollars a month in mostly passive income for you.
So, what is the success rate for a vending machine business? A whopping 90%! Source
When you combine the low failure rate, affordable startup costs, and simple operations of this business, I think you have a winning formula.
If you want to learn more about how to start a passive vending machine business, check out my beginner's guide to passive income with vending machines.
Laundromats are another great business that enjoys an amazingly low failure rate. According to Laundrylux, laundromats enjoy a 95% success rate over a 5 year period! Again, nothing is guaranteed in business, but that seems tantalizingly close.
This is a great recession-proof business that can make you money no matter what else is happening in the economy. People will always need to get their clothes washed and dried.
The great thing about a laundromat is that it can be run mostly passively. The machines do all of the hard work of washing and drying the clothes (and your customers do the work of loading and unloading the clothes). You will still need to take care of cleaning the laundromat, making repairs to the machines when needed, and collecting the money from the machines (the fun part!), but even for these activities you can hire people to do them for you.
If you want to learn more about starting a passive laundromat business, check out my detailed article on the topic here. In that post, I show you how to launch a laundromat that generates passive income in just 6 simple steps.
Rental Property Businesses
This one is near and dear to me. I am an avid believer in real estate investing and own nine rental properties. They have been the single biggest contributor to my financial success. But don't just take my word for it. Andrew Carnegie is famously quoted as saying:
Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.
So it should come as no surprise that real estate investing enjoys an enviable 85.3% success rate.
Why is real estate such a great business? You can enjoy cash flow each month, your tenants pay down your mortgage for you, and your properties tend to appreciate over the long term. If you combine these features with the fact that you can buy rental properties with a loan and use that leverage to increase your returns even more, you have a powerful wealth generator.
Plus, your rental property business can be structured to generate passive income – all you need to do is hire a property manager. But you don't need to. I manage all 9 of my properties myself and only spend between 5-10 hours per month. That's pretty passive in my opinion.
If you want to learn how to get started in rental property investing, check out my step by step guide to start investing in rental properties.
Self Storage Facilities
If you like the idea of real estate investing, but don't want to deal with tenants, trash and toilets, self-storage facilities may be a great option for you. These resilient businesses enjoy a remarkable 92% success rate.
And if you want to make your self-storage business as passive as possible, you can start an unmanned self-storage business. Advances in technology make this not only possible, but easy. People can now use their phones to book the storage unit, obtain the code to unlock the unit and simply move their stuff in. No manager onsite is needed.
If you want to learn more, check out my step-by step guide to starting a passive self-storage business. I go into detail on all the key info you will need to get started.
With the emergence of e-commerce, the gig economy, and online platforms, it is easier than ever to start a transportation business.
What is a transportation business, you ask? Simply put, a transportation business is a business that delivers goods or people from one place to another for a fee.
A transportation business can come in many forms, from a full-fledged long haul trucking business to a simple little side hustle driving for Uber on the weekends (and everything in between).
And these types of businesses enjoy a very good success rate of 76.4%.
Now, your results may vary and certain transportation business are going to be more risky than others, but on average, you are looking at a really solid success rate.
If you are interested in learning more about transportation businesses and how to get started, check out my comprehensive article on the topic entitled Transportation Business Ideas that Work [Ultimate Guide with 30+ Business Ideas]
Agriculture businesses are highly resilient and tend to have low failure rates. These can encompass many different types of businesses including farms and a host of related businesses.
Agriculture businesses enjoy an awesome 88% success rate. So if you have a green thumb and an interest in farming or other agriculture-related businesses, this may be perfect for you.
Dump Truck Businesses
According to smallbiztrends, the mining industry has the greatest survival rate among all sectors.
Of course, starting a mining company is going to be complex and take a lot of capital. But there is a clever little back door way to capitalize on the stability of companies in the mining industry.
You can start a dump truck business.
If you live near mining operations, there will always be demand for dump trucks that can haul away coal or other materials being extracted from the mine. The great thing is that you don't have to spend millions of dollars to start a mining operation – a used dump truck can be bought for as little as $15,000!
Not only that, dump trucks are versatile – you are not limited to working with the mining industry. So even if you don't live near a mine, there can be plenty of demand for your services coming from construction companies, landscapers, real estate flippers and even residential property owners who need to haul away large amounts of junk.
If you want to learn more about how to start your own dump truck business, check out my article on the topic here. I cover in detail how much you can make, how much it costs to start, how to find jobs, and much more.
So there you have it – 7 great businesses that enjoy awesome success rates.
If you want to learn how to start a business, check out my ultimate beginner's guide to starting a business. We cover everything from generating ideas, naming your business, creating a logo, establishing your legal entity, creating a business plan, setting up a marketing strategy, and much more.
If you are looking to build a business for the long term, check out my article on small businesses that will always be in demand.